Press Release

Nasscom makes suggestions on proposed changes to e-commerce rules


The National Association of Software and Services Companies (Nasscom) has made suggestions to the Department of Consumer Affairs (DoCA), Ministry of Consumer Affairs on the proposed amendments to the Consumer Protection (e-Commerce) Rules, with a focus on strengthening consumer protection, ensuring that the obligations are proportionate to the underlying risks and are unambiguous.

Towards this, Nasscom focused on proposed amendments dealing with misleading information, provision of accurate information to consumers and appointment of additional officials for grievance redressal and compliance with the e-Commerce Rules.

Further, some of the proposed amendments appear to be beyond the scope of the Consumer Protection Act 2019 (COPA19) and are instead a subject matter of either the Competition Act, 2002 or the Information Technology Act, 2000.

The IT body suggested that the proposed requirement be either done away with or aligned with the objective of COPA19. For example, Rule 6(7) of the proposed amendments restricts marketplace entities from offering any goods or services to registered sellers. “We have suggested to remove this obligation as this is not an unfair trade practice per se and at a policy level, is already dealt with under the FDI Policy,” said a Nasscom statement.

“In our submission, we undertook a clause-by-clause review of the proposed amendments and suggested the way forward. We have provided in-line changes to the text of the e-Commerce Rules  notified on July 23, 2020, based on some of the proposed amendments, in track-mode. We found this to be a useful way of suggesting changes to the e-Commerce Rules,” it said.

Nasscom has also Suggested the removal of the word ‘own’ from the definition of an e-commerce entity. This is with the aim of excluding from the scope those technology entities that own the digital platform and license/provide it to e-commerce companies. E-Commerce companies in turn operate and manage the front-end platforms. Therefore, the definition should only include entities that operate and manage the e-commerce platforms.

There is also a suggestion to include an obligation on the seller not to mis-sell. A suggested definition of ‘mis-selling’ is provided.

Instead of prohibiting certain activities, suggested to include an indicative list of unfair trade practices that the Central Consumer Protection Authority (CCPA) may investigate upon, for ensuring consumer protection:

  • Misleading users by manipulation of search result or search indexes having regard to the search query of the user.
  • Use information collected by marketplace e-commerce entities, for sale of goods of a brand which is owned/associated by it, if such practices amount to unfair trade practice and impinges on the interests or rights of the consumers.
  • Flash sales, cross-selling, mis-selling, manipulation in ranking of goods and services, if such practices amount to unfair trade practice or impinges on the interests or rights of the consumers.

It that consumer consent be required for sharing consumer information to any person unless it is for the fulfillment of an order or providing any services as promised by the e-commerce entity. Also certain obligations be imposed on all e-commerce entities. For example, an explanation in plain language about the parameters used to rank sellers, goods or services on the platform.

In case of fallback liability, the IT body suggested that the obligation on a marketplace e-commerce entity should be to the extent of ensuring timely refund to consumers if the consumer has already paid for such goods or services.

“There are many areas where the proposed amendments are unclear, and we have taken the opportunity to highlight these in detail. We believe these suggested changes will address the concerns of both the DoCA as well as the industry,” it said.

Nasscom is trying to focus on the centrality of consumer protection and ensuring maximum protection to the consumer in case of unfair trade practices Moreover, keeping in view the uniqueness of different e-commerce models and rationalizing obligations in line with activities of relevant entities in the e-commerce supply chain, there is a need to revise the framework for consumer protection, it said.

Nasscom believes it has always advocated in favor of consumer protection, and is against unethical business practices or violation of laws.

“We will continue to work closely with the Government and the industry towards enabling a robust regulatory regime, as that is essential for ensuring consumer protection and growing trust in the market,” said the statement.

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